The Avenue Murfreesboro up for sale

Getahn Ward/The Tennessean—The Avenue Murfreesboro regional lifestyle shopping center is under contract and could sell for what would be a record price for a non-mall, open-air retail property in Tennessee.

Cameron Golden, a spokesman for Atlanta-based Cousins Properties Inc., which co-owns The Avenue through a joint venture with Faison Enterprises, confirmed the 810,000-square-foot retail center is on the market. “It’s part of our larger strategy to focus on trophy office towers in the Southeast,” he said. The company, which is structured as a publicly traded real estate investment trust, is seeking to sell off some of its retail assets.

Real estate brokers familiar with the local marketing effort said The Avenue Murfreesboro is already under contract and could top the $135 million paid for the Turkey Creek commercial/retail complex in Knoxville a few years ago, which is regarded as the largest non-mall retail building sale statewide.

“It’s a good asset well-positioned in a growing, vibrant market like Murfreesboro,” said Steve Rudd, partner in real estate development firm Rudd Seeley Wallis. “There’s going to be plenty of potential buyers. The issue is going to be: Can they get the price they want?”

As of June 30, The Avenue Murfreesboro was 85 percent leased with Belk, Barnes & Noble, Best Buy, Dick’s Sporting Goods and Off Broadway Shoes among anchor or key tenants. Several real estate observers agreed the potential buyer is likely to be a large real estate investment trust, pension fund or insurance company, rather than an individual.

In the second quarter of last year, Cousins sold The Avenue Collierville near Memphis for $55 million. Last month, the company agreed to pay about $1.1 billion in cash to buy Greenway Plaza, a 10-building, 4.4 million-square-foot office portfolio in Houston, and 777 Main Street, a 980,000-square-foot Class-A office tower in Fort Worth, Texas. It plans to fund that deal via issuing stock, anticipated sale of non-core assets and mortgage financing.

Competitive market

Jeff Green, a Phoenix-based retail analyst, said retailers at The Avenue Murfreesboro have generally performed at average levels, and some have performed slower than projected at their openings. “The Nashville market has become fairly competitive,” he said, adding that the flood of retailers that opened shops in Murfreesboro had expected faster growth in the number of households in the area, but that the growth was slowed by the recession.

Green, however, still expects significant growth in Murfreesboro and Rutherford County.

David Baker, a principal with Baker Storey McDonald Properties in Nashville, said The Avenue and overall Murfreesboro shopping space market were probably a little overbuilt. Some larger stores at The Avenue Murfreesboro, however, have performed well, he said.

Among other recent high-profile sale of retail properties in the Nashville area, in late 2011 Taubman Centers Inc. of Bloomfield Hills, Mich., paid $560 million for The Mall at Green Hills in Nashville and The Gardens on El Paseo and El Paseo Village in Palm Desert, Calif.

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Jeff Green Partners was founded in May of 2004 in response to a growing demand for a new level of expert consulting services in the retail real estate marketplace. Led by President and CEO Jeff Green, Jeff Green Partners provides a full spectrum of analytical and interpretive services for property owners and developers.